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An employment contract may be concluded for an indefinite period or for a fixed term, in cases where this is legally permissible. The contracting parties are free to agree on whatever duration they consider appropriate; the contract is presumed to be indefinite if there is no written agreement limiting its duration.
Fixed-term contracts can be divided into two broad categories: those that carry subsidies and reduced Social Security contributions, and those that do not.
First, within the category of contracts with subsidies and reduced Social Security contributions, several types exist:
1.- Cover for an employee on maternity leave or leave due to pregnancy risk: This contract lasts only until the covered employee's return from maternity leave, regardless of whether that employee actually returns to work. The reduction in Social Security contributions is 100% for common contingencies and workplace accidents.
2.- Cover for an employee on unpaid leave for childcare: This contract lasts until the covered employee returns to work. The reduction in Social Security contributions is 95% during the first year of the covered employee's leave, 60% during the second year, and 50% during the third.
3.- Training contract: This contract has a specific feature, it cannot be used on a part-time basis. Its purpose is to provide the theoretical and practical training required to properly perform a trade or a skilled role. In addition, the employee must meet the following conditions in order to be engaged under this contract:
· Be between 16 and 21 years of age and not hold the qualification required to enter into a work placement contract (the upper age limit does not apply if the employee has a disability).
· Not have performed the same role within the same company for more than 12 months prior to being engaged under this contract.
· Not hold the qualification required to carry out the relevant trade or occupation.
Apprentices contribute to Social Security and are covered for work-related accident and occupational illness, healthcare, maternity, and the Wage Guarantee Fund. Converting this type of contract to a permanent one is incentivised by a 20% reduction in Social Security contributions for common contingencies during the following 24 months.
Secondly, within the category of contracts with no subsidies or reductions in Social Security contributions, there are also several types:
1.- Substitution contract: the purpose of this contract is to replace employees entitled to have their position held open, and to temporarily cover a post during a selection or promotion process for its permanent filling. To use this contract, the employee being replaced must be entitled to job reservation by virtue of legislation, a collective bargaining agreement, or an individual agreement.
The duration of the contract will be the period during which the replaced employee's right to job reservation subsists, or the duration of the selection or promotion process.
The contract is terminated upon the return of the replaced employee, upon expiry of the deadline for return, or upon the end of the cause that gave rise to the job reservation.
2.- Temporary contract for production circumstances: the purpose of this contract is to meet temporary market demands, task backlogs, or order surges, even where these relate to the company's ordinary activity. A written contract is only mandatory where its duration exceeds 4 weeks.
Extensions may cover a maximum of 6 months within a 12-month period counted from the start of the task backlog or order surge; sectoral collective agreements may modify these limits, up to a maximum of three-quarters of 18 months. The contract may be extended without exceeding the maximum duration, with one extension permitted. Contracts concluded for less than 6 months that have not been expressly extended will be deemed tacitly extended to that duration, provided no notice of termination has been given.
3.- Contract for a specific project or service: this contract covers the carrying out of specific works or services that have their own autonomy and distinct identity within the company's activity, the execution of which, although limited in time, is of uncertain duration. This contract must always be made in writing.
The duration of the contract shall be for the time required to complete the specific work or service in question, that is, until the tasks relating to the employee's specialism within that work or service are finished. There is no maximum time limit; the only limit is the completion of the work being carried out. The contract cannot be extended, as it has no fixed end date. If the duration exceeds one year, the party wishing to terminate must give the other party at least 15 days' notice.
4.- Work placement contract: The purpose of this contract is to provide practical experience in line with the employee's studies. It is available to workers holding a university degree, a vocational qualification (intermediate or advanced level), or other official qualifications. The qualification must have been obtained no more than four years before the contract is signed. For workers with disabilities, this period extends to six years. The probationary period is one month for intermediate-level graduates and two months for advanced-level graduates.
The contract must last between six months and two years; within those limits, sectoral collective bargaining agreements may set the specific duration. The employee receives the salary established in the applicable collective bargaining agreement for trainees, which may not fall below 60% of the standard rate for their job category in the first year, or 75% in the second. This contract must be drawn up in writing, and the employer may request a certificate from the public employment service (formerly INEM) confirming how long the employee has previously been engaged under placement contracts for the same qualification with other employers.
In practice, the legal requirements for fixed-term contracts are not always met, which is why an inspection campaign targeting temporary contracts has been launched.
To combat the fraud arising from the abuse of temporary employment, the various Regional Labour Inspection Committees, which include representatives from Spain's Autonomous Communities, have drawn up plans that share a common, consistent approach. These combine an initial phase of information and awareness-raising about the unjustified overuse of temporary contract types, particularly event-driven contracts and contracts for specific works or services, as well as the excessive rotation of temporary contracts within the same company; this is followed by a second phase of inspection and, where appropriate, the issuing of penalty proposals.
In Catalonia, actions are planned targeting approximately 2,000 companies and 14,760 contracts, focusing on those companies with the highest rates of temporary employment, staff turnover and/or workplace accidents. The primary objective is to convert temporary contracts into open-ended ones. Efforts will also target the reduction of unjustified temporary employment in contracts with Temporary Employment Agencies (ETTs, Empresas de Trabajo Temporal).
